The Sunday News
The Sunday News is publishing parts of the Transitional Stabilisation Programme Reforms Agenda to conscientise the public on the Government’s new economic trajectory.
* Continued from last week
EXPENDITURE management measures to address fiscal imbalances and ensure the National Budget anchors Zimbabwe’s developmental agenda are integral to the Transitional Stabilisation Programme over October 2018 to December 2020.
In this regard, the expenditure framework for 2019 and 2020 is premised on fiscal re-balancing and consolidation efforts which will anchor recovery of business and investment, also against the background of anticipated positive returns from re-engagement with the international community.
Public Finance Management System
During the period to 2020, the Transitional Stabilisation Programme will prioritise strengthening of the Public Finance Management System, building on work already being conducted, under the World Bank managed Zimbabwe Reconstruction Fund, to roll out the system to cover all Districts.
Treasury will, in the context of the Transitional Stabilisation Programme, also put in place measures to ensure the strict enforcement of approved penalties for cases of non-compliance with requirements of public resource management legislation.
Wage Bill Containment Measures
The 2019 and 2020 National Budgets will institute Wage Bill Containment Measures which will reduce the annual Wage Bill outlay by around US$200 million (0,7 percent of GDP) and US$130 million (0,4 percent of GDP), respectively. These measures include: Moving away from an unfunded ‘‘Pay-As-You-Go’’ pension arrangement by adopting a funded Defined Benefit Pension Scheme or Defined Contribution Scheme arrangement in line with best practice in other jurisdictions.
Further review of Treasury Subventions. Right-Sizing Public Employment. Rationalisation of posts in the Public Service.
Strengthening Wage Bill Management. Further reductions in Budget Travel expenditures. Further review of expenditures on fuel benefit levels from January 2019. Curtail acquisition and provision of vehicles by the State, including replacement of condition of service vehicles. Enforce measures on the use of Government Operational Vehicles by Public Officers.
Rationalisation of the Foreign Service Missions. Review of Parliamentary sitting allowances. Limit expenditures on By-Elections.
Reform of the Public Service
The Programme recognises the need to reform the Civil Service, that way beginning to make inroads towards managing the wage bill, which currently constitutes a disproportionate share of total Government expenditure. To this end, the Civil Service will be recalibrated to propel the country to greater heights of prosperity for all citizens.
At the operational level, the reform of the Civil Service is targeted to change its existing orientation, structure, functioning, temperament, performance, efficiency and ethical base as the vital cog that is charged with the planning, implementation and improvement of national welfare and achievement of the development results and outcomes for all citizens.
The pursuit of Civil Service reform is informed by and designed to address a wide range of policy, institutional, systems and performance related challenges that characterise the existing Civil Service in Zimbabwe.
Public Enterprises, Local Authorities’ Service Delivery
The Transitional Stabilisation Programme recognises that there is general low confidence in public institutions which include our public enterprises as well as our local authorities. The Programme, therefore, targets scaling down over-reliance on recourse to unsustainable fiscal interventions and resort to Government guarantees by public entities and local authorities.
Government will expedite the implementation of the Cabinet decision on restructuring, partial or full privatisation of entities with the following options being pursued: Liquidation. Full privatisation. Transformation to regulator. Merging and de-merging. Departmentalisation into existing Ministries.
Public Corporate Governance
The Transitional Stabilisation Programme will operationalise the Public Entities Corporate Governance Act, in order to rein in failing public entities, restore order, consistency, transparency and accountability in their operations. Further, the Transitional Stabilisation Programme will review and extend the coverage of the Public Entities Corporate Governance Act to Local Authorities from the last half of 2019 in support of enhancing service delivery.
Empowerment of Provinces
While Zimbabwe remains a unitary State, the implementation of the country’s development programmes will allow for devolution to achieve fair and balanced development, spearheaded by Provincial Councils which will initiate development programmes for their respective Provinces, consistent with Section 264 of the Constitution. The Transitional Stabilisation Programme outlines targeted programmes to champion economic development across the Provinces, including the big cities such as Harare and Bulawayo.
This represents a new Governance Dispensation where decentralisation becomes a key feature and strategy for fair and just governance across its four dimensions, namely administrative, political, fiscal and market. To this end, the Civil Service Commission will facilitate the transfer of the requisite functions and establish the structures and systems that will enable all Provinces to plan and implement their economic growth and development using their factor endowments.
Rent Seeking and Corrupt Behaviours
The Transitional Stabilisation Programme contains specific measures to uproot entrenched indiscipline and corruption, including nipping in the bud all opportunities for rent seeking. The necessary disincentives and penalties for rent seeking, indiscipline and corruption are also an integral component of this Transitional Stabilisation Programme. This will include the review of the Penalty regime so that persons guilty of corruption are subject to effective, proportionate and dissuasive penalties, including empowering Courts, on the application of the Prosecutor General, to grant Civil Forfeiture Orders in respect of property from proceeds of corruption.
To further consolidate on the measures already put in place to cleanse society of the scourge of corruption, the Transitional Stabilisation Programme will strengthen and capacitate institutions and public service systems that enable early detection of corruption.
Ease of Doing Business
The Transitional Stabilisation Programme will implement further measures to the Ease of Doing Business Reforms, with the objective of improving the country’s competitiveness in terms of the business and investment environment. This includes enforcing contracts, which currently is time consuming and difficult for the average business entity. The Transitional Stabilisation Programme will also put in place the necessary legislative and administrative reforms to consolidate and harmonise the various scattered legislative pieces into an omnibus investment Act. The Act will bring in the birth to the Zimbabwe Investment and Development Authority, that way operationalising it as a One Stop Investment Authority.
Integrating into Global Financial Markets
The Transitional Stabilisation Programme embraces all the major elements for re-engaging co-operating partners over resolving Zimbabwe’s external payment arrears, including having in place a comprehensive and coherent macro-economic policy framework, underpinned by a strong programme of fiscal adjustment and structural reforms. The country’s foreign debt arrears amount to about US$5,6 billion, which is split among: Multilateral creditors, US$2,2 billion. The Paris Club, an informal group of creditor nations, US$2,7 billion. Non-Paris Club creditors, US$700 million. The sequence towards resolution to Zimbabwe’s debt arrears of US$5,6 billion, will require the country clearing first, and simultaneously, its arrears to the AfDB, US$680 million, and the World Bank, more than US$1,4 billion; and the European Investment Bank, US$308 million.
The re-engagement process with international financial institutions, in particular the World Bank and the African Development Bank, will also advance the Transitional Stabilisation Programme efforts to unlock external new financing required by the productive sectors.
Government will also continue to strengthen relationships with Development Partners for implementation of measures aimed at leaving no one behind and ensuring sustainable and inclusive economic development, consistent with the Sustainable Development Goals. In order to strengthen cooperation between Government and Development partners, work is currently underway to review the existing aid coordination architecture.
Sustainable External Flows
The need for a sustainable balance of payments position, underpinned by growing exports of higher value-added domestic goods is also emphasised. In this regard, the Transitional Stabilisation Programme targets taking advantage of distinct opportunities in the growing regional markets for increased trade, benefiting from deepening of regional integration initiatives being implemented under the AU, Comesa and Sadc. The Reserve Bank will also facilitate ring-fencing of targeted arrangements for facilities in support of the export sectors, central to growing the economy and lowering the current account deficit.
Productive Sector Reforms
This Section identifies challenges in the productive sectors of the economy, and proffers policy interventions to build investor confidence, and enable private sector led economic growth.
In this regard, improving Zimbabwe’s investment and business climate, under the Transitional Stabilisation Programme, will entail consistent application of credible and sustainable policy interventions, underpinned by strengthening the rule of law.
Central will be: Sustained commitment to implementation of policies and measures that entail pain and sacrifice.
Avoidance of arbitrary policy reversals. Absence of contradictory policy pronouncements, and mis-interpretations by different agencies of the State.
In order to enhance competitiveness of industries, the Transitional Stabilisation Programme will institute measures that address underlying causes of high cost of doing business, including inputs supply across various value chains, access to enabling public utilities, domestic cost of finance, and introduction of flexibility in Zimbabwe’s labour laws. The Section will, therefore, focus on the following: Sectoral GDP Growth. Transforming Agriculture. Mining Exploration and Development.
Resuscitating Industry. Protecting the Environment.
